Federal Reserve Chairman Ben Bernanke is pushing back against congressional criticism that the central bank has gone too far in trying to stimulate the economy and said that the Fed has room to do more if needed.

With the economy growing at a slow pace there has been increasing scrutiny over whether the Fed should take additional steps to boost growth and try to lower high unemployment levels.

In a letter sent this week to House Oversight and Government Reform Committee Chairman Darrell Issa and obtained by POLITICO, Bernanke said the Fed has weapons left in its arsenal but was careful not to say whether or when they will be deployed.

“There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery,” Bernanke said in his August 22 letter to Issa, who has criticized the Fed’s economic efforts.

“By putting downward pressure on longer term interest rates,” the Fed has “helped to promote a stronger recovery than otherwise would have occurred, and to forestall the possibility of a slide into deflation,” Bernanke wrote defending past actions taken by the central bank.

Issa and other House Republicans have criticized Bernanke’s efforts to promote low interest rates, saying the repeated cash infusions have done little to stoke recovery while putting the country at risk for future inflation.

In a letter to Bernanke earlier this month, Issa suggested the low rates were essentially a “tax” on those who save money that is paid out to those who borrow it, including the federal government.

Bernanke rejected that argument in his response, saying “it is in everyone’s interest — savers and borrowers alike — to have an economy that is performing at its highest capacity.”

Bernanke and Issa are squaring off ahead of the the Federal Open Market Committee committee in mid-September, when Bernanke and his peers could decide to take further action.

There has been widespread speculation that the Fed will embark on a third round of “quantitative easing” — a series of bond purchases intended to stimulate investment by lowering interest rates.

Republicans, including presidential hopeful Mitt Romney, have argued against more easing, but proponents of action say it is needed to combat an unemployment rate that refuses to fall below 8 percent.

If the Fed does attempt new stimulus, it would likely involve such purchases of bonds or other assets, as the central bank has already exhausted many of its traditional economic instruments to create the already-low interest rates, Bernanke wrote in his letter to Issa.

But the chairman stopped well short of promising new stimulus.

“The expected benefits of these tools need to be balanced against their potential costs and risks,” he wrote.

In his letter, Bernanke also repeated his plea that Congress address its own arena of economic policy: taxes and spending.

“Monetary policy is not a panacea, and policymakers in many different areas should carefully examine the steps they could take to foster a more vigorous recovery,” he wrote.

In July, Bernanke implored Congress to address the “fiscal cliff,” a series of tax increases and spending cuts set to kick in automatically at the start of 2013.

Democrats and Republicans have been unable to reach a compromise to avert the fiscal cliff, despite warnings — such as one Wednesday from the Congressional Budget Office — that going over the cliff would send the U.S. economy into a recession.